Questions tagged [money]

any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment. Any item or verifiable record that fulfills these functions can be considered as money.

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26
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10answers
11k views

People pathologically hoard so much cash that they impoverish the entire nation

"If a man has an apartment stacked to the ceiling with newspapers we call him crazy. If a woman has a trailer house full of cats we call her nuts. But when people pathologically hoard so much cash ...
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4answers
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Why is bartering uncommon in modern countries?

Recently, I witnessed two acquaintances of mine engaging in bartering, where one traded his services for the services of the other. Both services had about the same value. By trading them directly, ...
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7answers
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Why do different countries have different currency?

Why do different countries have different currency? I have this question because I want to know why to divide it? If it's not divided then we can easily use the money anywhere and we won't need to ...
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5answers
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Can inflation occur in a positive-sum game currency system such as the Stack Exchange reputation system?

As most active users of this site know, the way the reputation system works is that everyone starts out with 1 reputation and a user can earn more reputation by asking good questions and writing ...
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2answers
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In today's money, what was the value of a 1492 Spanish maravedí?

Satava (2007) estimates that the costs of Columbus's 1492 voyage was 1,765,734 maravedís. In today's money, what was the value of a 1492 Spanish maravedí?
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1answer
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Wouldn't abolition of cash give rise to a substitute currency?

Some countries (e.g. Sweden and Denmark) plan to abolish physical cash in the future and restrict the use of cash to electronical deposits. One of the reasons for this is to prevent hoarding / boost ...
10
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3answers
2k views

Money in the animal kingdom

Animals living in packs must have ways to decide how to distribute their goods among the pack members. Just like prices can appear in an exchange economy, prices could appear in pack economy. Though ...
8
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4answers
262 views

What is money really?

Say I have €1000 (or $1000) on a bank account. What is that money really? Is it a value stored on some computer at the bank where I have the bank account, a value stored at the central bank of the ...
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8answers
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What would be the effects of an expiration date on currency?

Let's say we introduce a monetary system where each piece of money is printed with an expiration date - a year, perhaps. I'm imagining something rather different from inflation (although I do not ...
8
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6answers
822 views

Is money a conserved quantity?

Excuse the naïve question, but I have a rather limited understanding of economics, and this question has been bothering me since my school economics teacher couldn't answer it satisfactorily many ...
8
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2answers
791 views

How and when is M0 money created?

The Federal Reserve Coin and Currency Service Website describes their currency order process thus: The 7.2 billion notes included in the FY 2015 order reflect the Board’s estimate of net demand for ...
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1answer
22k views

How much money is wire transferred every year worldwide?

How much money is wire transferred every year worldwide? Estimates are fine.
7
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4answers
602 views

How is money created on net?

I have the impression that everyone has more net money than in the past. By net money I means cash + money lent to others - money borrowed from others. If this is true, where does the extra net money ...
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6answers
648 views

How can the stock market keep growing indefinitely?

It sounds like a dumb question, but there is only so much money in the world. Assets can grow, but money can only be printed. So if there is 400 trillion dollars worth of money in the world, and the ...
7
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4answers
4k views

Why can't a government print money to pay its debt?

I have written an explanation to one of the famous questions "why can't government print money to pay its debt". Is my explanation correct? Is this the similar situation which happens in ...
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3answers
220 views

Would a fair distribution of wealth from the super rich increase the purchasing power/life quality of the average person?

I will start by saying that I do not have any background in finance and that the following question might be very much naive, but it has been bugging me for a while now. The general narrative seems to ...
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3answers
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What prevents a bank from simply going into their computer system and adding some zeros to their bank account? [duplicate]

This question has been bothering me for a long time and I’m hoping that someone here can help to answer it. I will use Greece as an example, but my question could really be applied to any country or ...
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2answers
353 views

The Printing of Money for Paying Debt

I know that printing money causes inflation, but what if we print it to pay back our debts? For example, we have N dollars of debt to China. We can just print the N dollars and give it to China. ...
5
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2answers
846 views

Is money capital?

The Oxford English Dictionary defines "capital" as n. economic goods (e.g. railways, ships, machinery, buildings) destined for use in production (as opposed to consumers' goods). Historically, the ...
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2answers
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Why is the money supply perfectly inelastic?

From my notes: We analyze the determination of the interest rate using a supply/demand model relating the interest rate (price of money) to the quantity of money. Since we assume: 1) no excess ...
5
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2answers
261 views

Do general equilibrium models include money?

An economics professor told me that General Equilibrium models are a sophistication of barter. Does that imply that they don't include money? And if that is the case, are there any attempts to include ...
5
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2answers
190 views

Under the gold standard, how did the redemption of gold work in practice?

For example, in the US: In 1834, the United States fixed the price of gold at $20.67 per ounce, where it remained until 1933. (EconLib) Does this mean that anyone with US\$20.67 could walk up to ...
5
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1answer
8k views

Are prepaid cards, and gift cards considered a form of money?

Are the followings considered a form of money prepaid (debit) cards gift cards (both bank-issued such as American Express gift cards, and store-issued such as Walmart gift cards) ? Are their ...
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3answers
192 views

Is it reasonable to consider government bonds as money

Some measures of the money supply include governments bonds... but I wonder to what degree governments bonds can be considered money. IMHO the degree to which X can be thought of as money equals the ...
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4answers
1k views

Gold coins as currency?

My question is about gold standard. But not the version I always see mentioned (trading bills for gold at a set price). I mean having gold coins in circulation. For example, new currency consists ...
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3answers
123 views

In which country does my money have the largest purchasing power?

To be honest i have literaly zero economic knowlegde so please treat me as a noobie in this case. Here is the questin: I live in Poland where my native currency is polish zloty (PLN), and i want to ...
4
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4answers
470 views

Why does an economic slowdown lead to deflation?

Usually economists say that in recession there is deflation, so increasing the money supply does not lead to a high level of inflation. According to the Quantity theory of money, the price level is ...
4
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3answers
140 views

How can you know which is the “current dollar value” of a dollar value from another decade?

Is there a mathematical ecuation or some method, which allows you to have the "current dollar value" of an amount dollar from other year, let's say, decades ago? For example, it's said that the ...
4
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3answers
790 views

How is money destroyed when banks issue debt?

Bank of England (2014): Money can also be destroyed through the issuance of long-term debt and equity instruments by banks. How is money destroyed when banks issue debt? Say Bank X issues a £100 10-...
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4answers
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“Demand for money” - definition

What is the definition of "demand for money". The definition given by Wikipedia appears gibberish to me. And just to double check - what are the units of demand for money? Is it measured in "dollars"? ...
4
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1answer
2k views

Best resources to self-educate myself in economics

I want to learn Economics by myself and I'm looking to build a path with people who're in this field to how and in what order should I learn Economics, I did some research and I've found many ...
4
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1answer
135 views

Could money be tied to a basic good like the gold standard?

I don't have a formal education in economics but I had an idea for creating a better and fairer currency. So the gold standard ties gold to the dollar. Gold is usually used in luxury items like ...
4
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0answers
72 views

How Africans use their wages?

I was researching poverty in Africa and was reading about their daily wages. Based on the article linked, 2/3 of Africans live on less than $1.25 USD, a day. However, what this article and many ...
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2answers
198 views

Why does every electronic transaction of USD legally take place on American territory?

In an article of a respected German newspaper (Die Zeit) I found the following statement (translation by me): 90 % of all foreign exchange trades are dealt in USD. Since every electronic ...
3
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2answers
233 views

How can all the bitcoin in the world be worth more than McDonald's Corporation?

What makes bitcoin so valuable? It has already surpassed the value of almost all publicly traded companies. I understand it can be used to buy things like digital money but why does the price go up? ...
3
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1answer
467 views

What is an IOU?

I'm reading a paper right now that refers to divisible and one-period IOUs, but doesn't explain what the shorthand stands for. I understand it's a unit of payment, and guess that is the same "thing" ...
3
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3answers
94 views

Creation of Money - Hypothetical Situation

Imagine you sell me some consulting services. I don't have any cash, so I give you a $100 IOU instead. You now have a $100 Note Receivable on your Balance Sheet. ...
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2answers
2k views

Why is M0 higher than M1?

In my understanding, M2 includes M1 and M1 include M0. However, I checked the money supply here and used the "Compare" function to compare the money supply of m0 with money supply of m1, and found ...
3
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2answers
689 views

How could Pablo Escobar earn so much money?

I read it's about 30 billion. But I read there were 6 million users in 1985. Let's say he gets 10 percent of the sales price, it means each person paid 50000 dollars for cocaine. It sounds way too ...
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3answers
2k views

Is the utility of money *actually* logarithmic?

Apologies for asking what is probably a basic question from someone that is not in the economics field. But I was playing around with the idea of determining how a group of people could split a bill ...
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4answers
6k views

Why does a decrease in interest rate reduces the velocity of money circulation?

I have seen sources that claim high interest rates increase the velocity of money circulation, but haven't really seen any concrete explanation for this. This is how I think it works: High interest ...
3
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3answers
103 views

Do conceptual ideas that become standardised ever make money?

TL;DR - Do standardised concepts ever make money? Recently I have been wondering if conceptual ideas ever make money, more specifically whether a conceptual idea that is standardised ever makes money?...
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2answers
556 views

Is money supply affected by the stock market?

Do stock prices have any effect on the money supply of an economy? Please provide a simple example if possible. Intuition suggests there is more money around when prices are high (consider for ...
3
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1answer
117 views

What are the widescale economic ramifications of people holding onto their money instead of spending it?

Pretty simple question: people get rich by saving more money than they spend. What are the implications of people holding onto their money instead of spending it? Do rich people save more money (...
3
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4answers
239 views

Does Bad Money Drive Good Money Out Of Circulation

I have heard the saying, "Bad money drives good money out of circulation," (Gresham's Law) many times. I'm wondering if it's true, what it really means. What's good money? What's bad money? And if ...
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1answer
46 views

Hyman Minsky's view on Bank Examination

In Stabilizing an Unstable Economy (1986), Hyman Minsky argues that "bank examination is largely perfunctory... rather than an inquiry into the economic viability and the exposures to risk of banking ...
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3answers
166 views

What is Q in the quantitative theory of money?

I am testing the quantitative theory of money for South Africa. QP = Mv. It is fairly clear what M and P are (broad money, or M1, price index, etc). But I am puzzled with Q. Is it GDP or does it ...
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0answers
7k views

Did the robbers from Money Heist real steal noone's money?

Money Heist (original Spanish title: La Casa de papel) is a Spanish TV show about a bank heist. From Wikipedia (bolding mine), In Money Heist, a mysterious man, known as "The Professor", is ...
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3answers
91 views

How much physical currency does the Fed transfer to banks per year?

I just wonder since money has to enter the system somehow. Currently the Fed will supply whatever banks ask to meet their capital needs. But how much physical currency does the Fed, treasury, and mint ...
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3answers
488 views

Is money mostly created (out of nothing) by banks making loans?

In the Bank of England's Quarterly Bulletin, 2014 Q1, McLeay, Radia, & Thomas write a pair of articles titled: "Money in the modern economy: an introduction" and "Money creation in ...